New report shows that state tax incentives can be more effective at creating jobs

Today we’re re-posting from Progressive Pulse about a new report from the Budget & Tax Center on state business tax incentives. The report finds that many of the state’s tax incentive programs can be made more efficient, in order to create jobs and increase accountability. As the report states, “Four discretionary incentive programs have accounted for $2.4 billion in direct spending on economic development incentives in the years between 1996 and 2008.” In a time when state resources are stretched thin, this report provides a pro-active solution to how we can effectively create jobs and promote business in our state.

The N.C. Budget and Tax Center released a special report this morning that finds North Carolina’s economic development incentive programs could be made more effective through strategic public investments.

Due to high unemployment and a sluggish economic recovery, state leaders have lately been scrutinizing the effectiveness of the state’s economic development incentive programs in generating employment growth. These programs offer cash assistance to individual firms to induce investment and job creation in North Carolina.

The BTC report (“Mediated Incentives: Making North Carolina’s Economic Development Incentive Programs Work Better through Strategic Investments”) finds that the state’s incentive programs could be more effective at job creation if these subsidies were attached to strategic public investments in targeted, growing sectors of the state’s economy through a process called “mediation.”

Mediation helps the state’s incentive programs—both those designed to recruit new firms to North Carolina and those designed to retain existing firms within the state—produce meaningful employment growth within those industry sectors directly or indirectly connected to sector-specific, targeted, strategic planning, the report finds. Leveraging strategic public investments such as community college and workforce development programs promote more strategic—and more effective—industry retention and recruitment efforts.